Public hospital is the main body of Chinese healthcare system. It is the principal site for people to seek medical services，and the key force to achieve healthcare high-quality development as well. The role of performance appraisal system in public medical care is not only a test and a baton to governmental healthcare reform and development，but also a strong grip to improve the management of public health facilities. By focusing on its designing thoughts，performance indicators system itself and its matching policies，this article described a normal path of promoting high quality management of public hospitals by implementing Key Performance Indicators（KPIs）. The performance management，including professional guidance，accurate guidance，and performance appraisal，contributes to the high quality development of public hospitals. The performance indicators system，based on its functions of standardization，improvement and integration，provides a management path of high quality development of public hospitals. Policies that regarding the performance appraisal system have initially played their roles as “rulers” and “batons”. To describe and analyze the relation between KPIs and high quality development of public hospitals，which is a guidance for more output from matching policies and further improvements on management. In this way，could it provide references to reinforce？benefits？of？the？matching policies and improve governance capacity of public hospitals. The specific KPIs of the performance appraisal system meet people’s needs and policy requirements to public medical reform and development，and provide positive guidance as well as a management approach to high quality development of public hospitals.